LIBRARYOFCONGRESS. 

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UNITED STATES OF AMERICA. 



"PROGRESS AND POVERTY." 



A REVIEW 



DOCTRINES OF HENRY GEORGE. 



BY 

GEORGE BASIL DIXWELL. 



i 







^^'coP^"'^'^"rir""'*«f\ 



NOV 20 1882 / 



CAMBRIDGE : 
JOHN WILSON AND SON. 

Wini'atxsitz Pnss. 
1882. 



K'^ 



Copyright, 18S2, 
By George Basil Dixwell. 



PROGRESS AND POYERTY." 



I. 

In " Progress and Poverty " Mr. Henry George has given to 
the world a brilliant work, admirably written, full of eloquence, 
radiant with the noble aspiration of diminishing human suffer- 
ing, and absolutely devoid of that too common cowardice which 
stops at each sentence to consider whether the words about to 
be written will be in harmony with opinions avowed upon the 
other side of the Atlantic. 

But the ability and earnestness of the author and the tre- 
mendous importance of his subject make it all the more neces- 
sary to examine with care every doubtful premise and every 
questionable deduction, and to collect what evidence we can as 
to the exactness or carelessness of his methods of reasoning. Of 
these we have some specimens in an article published by Mr, 
George in the Popular Science Montlily for March, 1880, en- 
titled " The Study of Political Economy." In this he says : — 

" The effect of a tariff is to increase the cost of bringing goods from 
abroad. Now if this benefits a country, then all difficulties, dangers, 
and impediments which increase the cost of bringing goods from 
abroad are likewise beneficial. If this theory be correct, then the 
city which is the hardest to get at has the most advantageous sit- 
uation ; pirates and shipwrecks contribute to national prosperity by 
raising the price of freight and insurance ; and improvements in navi- 
gation, in railroads and steamships, are injurious. Manifestly, this 
is absurd." 

It is certainly absurd, but the absurdity must be looked for in 
Mr. George's reasoning. The true statement should be this : 
One of the effects of a tariff is to increase the cost of bringing 
certain kinds of goods from abroad. Nevertheless a tariff is said 



4 "PROGEESS AKD POVERTY." 

to be beneficial. If so, then everything which increases the cost 
of bringing from abroad not only tliose certain goods, but all 
goods, must likewise be beneficial. The obstacles he mentions 
not only raise the price of a particular kind or kinds of goods, 
but of all goods, and that of passage also, and they diminish the 
value of all exports. The railroad and the steamship facilitate 
every sort of exchange, but this does not prove that every sort 
of exchange is beneficial. Eum, opium, small-pox, and leprosy 
do not become desirable because distributed by rail and steamer ! 
A tariff does not stop all exchanges, but only some. That would 
be a droll syllogism which ran : " If to stop some exchanges 
be beneficial, then to stop all exchanges would be beneficial," 
Mr. George continues thus : — 

" And then I looked farther. The speaker had dwelt on the folly 
of a great country like the United States exporting raw material and 
importing manufactured goods which might as well be made at home, 
and I asked myself, What is the motive which causes a people to ex- 
port raw materials and import manufactured goods 1 I found that it 
could be attributed to nothing else than the fact that they could in 
this way get the goods cheaper, — that is, with less labor. I looked 
to transactions between individuals for parallels to this trade between 
nations, and found them in plenty : the farmer selling his wheat and 
buying flour ; the grazier sending his wool to a market and bringing 
back cloth and blankets ; the tanner buying back leather in shoes, 
instead of making them himself. I saw, when T came to analyze them, 
that these exchanges between nations were precisely the same thing 
as exchanges between individuals ; that they were in fact nothing but 
exchanges between individuals of different nations ; that they were 
all prompted by the desire and led to the result of getting the greatest 
return for the least expenditure of labor ; that the social condition in 
which such exchanges did not take place was the naked barbarism of 
the Terra del Fuegians ; that just in proportion to the division of 
labor and the increase of trade were the increase of wealth and the 
progress of civilization. And so, following up, turning, analyzing, and 
testing all the protectionist arguments, I came to conclusions which I 
have ever since retained." 

The reader who is familiar with the Free-Trade and Protec- 
tionist controversy will need no one to point out the weakness 
of the above paragraph. 



"PROGRESS AND POVERTY. 5 

To get goods cheaper is not the equivalent of getting them for 
less labor. 

To get the greatest return for the least expenditure of a small 
portion of its labor is not the proper aim of a nation, but to get 
the greatest Gross Annual Product obtainable by the whole of 
its available labor. This is a very different matter. 

That exchanges and division of employments find place in all 
but savage societies, does not prove that there must be division 
of employments between nations. It is not necessary that Eng- 
land should make up all our raw materials while we confine 
oui selves to agricultural pursuits. We are numerous enough 
to derive from the division of employments every possible 
advantage among ourselves. No man can be certain that the 
increase of wealth and the progress of civilization are "just in 
proportion" to the division of labor and the increase of trade, 
because these two last are not the only nor even the chief ele- 
ments in civilization ; but even if they were, we are not promot- 
ing the division of labor nor the increase of trade in the United 
States by confining ourselves to raising raw material. 

THE OBJECT OF INTERNATIONAL TRADE. 

The object aimed at in trading with a foreign nation is to 
get what is wanted cheaper in the sense of for less labor, cer- 
tainly; but this object is attained only when the reciprocal 
desires balance. When they do not balance, the party whose 
needs are the greatest in amount must give up more and more 
of any advantages arising from the exchange, and may have to 
give up the whole, — yes, and a good deal more than the whole ; 
for if he does not possess the skill and the fixed capital he cannot 
begin to manufacture (which is his only defence) until the other 
party has extorted from him twenty or thirty or more per cent 
over the rate at which he might manufacture for himself if he 
had the skill and fixed capital. And this is not the worst : B 
needs more of A's goods than A will take of his. He must pay 
in treasure while this lasts. He may produce, if you please, a 
hundred millions of treasure a year ; but if he pay out two hun- 
dred, he will soon find the basis of his machinery of exchange 
gone, only to be recovered after years of loss and misery, and 



6 "PROGEESS AND POVERTY. 

he will find that he must go without a large part of what he 
might have enjoyed through his own industry. He can per- 
manently obtain from abroad only so many goods as will pay for 
tliat quantity of his commodities which is needed in the outer 
world at the lowest price at which he can afford them. These 
are the conditions which the World offers to fifty millions of 
people, soon to be a hundred millions. If it were bargaining with 
five millions of people it might have to offer better terms. This 
is not merely protectionist doctrine, but is a necessary deduction 
from the propositions regarding international trade laid down by 
Mr. John Stuart Mill. But ]\Ir. George reasons as if the matter 
of proportional demands or requirements had no place in political 
economy. 

The reader may at first think that all this has nothing to do 
with " Progress and Poverty ; " but it has much to do with Mr. 
George's habits of thought, and these have shaped his book. If 
we find him making about free-trade deductions which involve 
a syllogism with four terms, — or a universal conclusion drawn 
from a particular premise, or the like, — we shall be prepared 
and on the watch for similar inaccuracies in the book we are 
about to examine ; and before going to the main subject it 
is well to quote from page 270 of " Progress and Poverty " 
the following : — 

"To these must be added, in the United States, the robbery in- 
volved in the protective tariff, which for every twenty-five cents it 
puts in the treasury takes a dollar and it may be four or five out of 
the pocket of the consumer." 

Now the duties collected have some years been over two hun- 
dred millions ; there must then, according to Mr. George, have 
been at least eight hundred millions, and perhaps four thousand 
millions, taken by the tariff from the pockets of the consumers. 
These Munchausen figures would have set any honest man like 
Mr. George upon a re-examination of the statements which the 
allies of the Cobden Clubs have the audacity to repeat year after 
year in the face of repeated refutations ; but he did not stop to 
see where his allegations would carry him, — and this is a lamen- 
table fact, as it throws his evident uprightness and earnestness 



"PROGEESS AND POVERTY." 7 

into the scales which are heavily weighted with falsehood and 
frivolity. The fact is noted in no hostile spirit. The internal 
evidence which " Progress and Poverty " contains of the pure, 
single-hearted, and noble motives of its author are overwhelming; 
and his object, " the alleviation of human misery," is one with 
which every true man must sympathize ; but the higher the 
object the more important it becomes not to fall into error as to 
the cause of the evil or as to the remedies which may be advan- 
tageously applied to it. 

THE AMEEICAN PROBLEM. 

Mr. George describes eloquently this century's increase in 
wealth-producing power, and thinks that if a Franklin or a 
Priestley had seen it in a vision he would have expected the 
very poorest to be lifted above the possibility of want, — he 
would have expected to see 

" Youth no longer stunted and starved ; age no longer harried by 
avarice ; the child at play with the tiger ; the man with the muck- 
rake drinking in the glory of the stars ! Foul things fled ; fierce 
things tamed ; discord turned to harmony ! For how could there be 
greed when all had enough'? How could the vice, the crime, the 
ignorance, the brutality, that spring from poverty and the fear of 
poverty, exist when poverty had vanished'? Who should crouch 
where all were freemen; who oppress where all were peers'?" 

But Franklin and Priestley were far from rhapsodists ; they 
were cool and wary thinkers and observers. They saw about 
them much vice, crime, ignorance, and brutality that were the 
cause of poverty, instead of being caused by poverty, as Mr. 
George assumes. They saw much poverty which need not then 
exist, had the sufferers been as free from vice, crime, ignorance, 
and brutality as they might have been under the then condi- 
tions of society ; they saw, indeed, much vice, ci-ime, ignorance, 
and brutality which even then had not the apology of poverty: 
moreover, they would have foreseen a vast increase in cities, 
where temptations are more numerous and restraints less power- 
ful ; where there is much wealth to be preyed upon, and compara- 
tively great opportunity of escaping detection; where Charity 



8 " PROGRESS AND POVERTY." 

rushes about eager to relieve the deserving, and often carelessly 
giving to the undeserving the funds which should have been 
better bestowed ; where men may live for months or years with- 
out knowing who lives in the next house ; where there are a 
thousandfold more opportunities for self-indulgence than in the 
village in which every one knows every one, and each man and 
woman is a wholesome restraint upon the rest. Franklin and 
Priestley, then, would hardly have expected as much as our 
author believes they would have expected : possibly they would 
not have expected even as nmch as has been accomplished. If 
they could have foreseen the condition of society to-day, and 
compared it, class for class, with what existed in their times, 
they probably would have gone down to their graves with 
bright hopes of the future. They would have seen great cities 
become as healthy as the village was in their days, and they 
would have seen a great and a general advance in the real 
wages of all classes of those who are able and willing to work. 
The change in this respect is most striking, and is within the 
scope of the personal observation of all who can look back thirty 
or forty years with a clear and distinct memory. To such no 
statistical proof is needed ; but such proof is at hand, for we 
have careful estimates of the gross annual product of the United 
States each ten years, and by these we find that there was 
earned enough to give each individual $61 in 1840, $69 in 1850, 
$83 in 1860, at least $110 in 1870, and at least $140 in 1880. 
Let us add 15 per cent to 1840 on account of possibly shorter 
enumerations then than now. Still we have only $70 in 1840 
against $140 now. But for 1880 we have not only estimates 
of the gross annual product: we have also those of the total 
/ value of the nation's accumulations, and made by the same hand 
^*^ (Mulhall). These make the property of the United States to have 

been forty thousand millions ; and this valuation was made at a 
time when Government could borrow at 4 per cent, and when few 
investments could be made to safely yield 5 per cent, and when 
farmers in the far west could borrow at 6 per cent. If, then, we 
take into consideration the fact that much property in real estate 
gave no return, but was merely held for a market, it will be seen 
that to assume the whole forty thousand millions of property to 



"PEOGEESS AND POVEETY." 9 

have paid its owners 6 per cent will be to err so much on the 
side of too high a rate as to cover any possible error which may- 
have crept in from undervaluation of the property at forty thou- 
sand millions. But 6 per cent upon forty thousand millions 
gives twenty-four hundred millions (out of the seven thousand 
millions of gross annual product) as the amount going in the 
first place to rent and profit. 

But what becomes of rent and profit ? On the average of 
years the annual product is used up, leaving at the end of each 
year the same percentage of stocks of commodities. Eent and 
profit are completely passed over to the renderers of services 
which do and services which do not issue in commodities. They 
are totally spent either for services, or for commodities, or for 
property which is expected to bring in an income, and which is 
formed by labor. Nearly all of the seven thousand millions 
gets into the hands of those who render services, of those who 
produce commodities, and of those who form those instruments 
of production and of convenience which are expected to yield a 
power of appropriating a portion of the enhanced annual products 
of future years. The recipients of rent and of profits enjoy the 
comfort, the consideration, and the luxury which the services of 
a large mass of the population can afford, and in return they 
pass over to this portion of the population nearly the whole of 
their share of the gross annual product. They retain nothing to 
the exclusion of the rest of the community except the raw mate- 
rials which enter into the commodities they and their immediate 
families consume. Even the gross total of their receipts is regu- 
lated by demand and supply, and can only be a portion of that 
which the community derive from the use of the capital (the 
fixed and floating instruments of production and instruments of 
convenience) which has been formed out of their savings. With- 
out the aid of these instruments even Mr. George (see p. 72) 
concedes that the total annual product could be only a small 
fraction of what it is now ; in other words, that it is of supreme 
importance that these instruments should be kept in repair, and 
that new ones should be formed to meet the demand of the 
rapidly increasing population. They are kept in repair by those 
who live within their incomes, New ones are formed by those 
who save. 



10 "PROGRESS AND POVERTY." 

Without the instruments of production now in use Mr. George 
declares that the product could not he a tithe, or a tenth part, of 
what it is now ; that is, the capital produces nine tenths, and, 
if our calculations be correct, the whole people get two thirds of 
this advantage, and the owners of the capital get one third ; but 
this one third they spend in such a shape as to cause the exist- 
ence of various classes wlio are not employed in producing neces- 
saries, and whose demand for necessaries enables those who do 
produce them to procure by exchange a vast amount of conven- 
iences and luxuries, and to be thus stimulated to make the earth 
yield a greater amount of necessaries. 

PROPERTY AS AN INCENTIVE TO PRODUCTION. 

Out of the institution of property, then, has grown both the 
present great productive power and also the distribution of the 
population into various grades of wealth, each of which stimu- 
lates the next poorer to strive to better its condition ; and this 
beneficent effect should be seen most fully in the United States, 
where the almost universal sentiment of the people demands the 
equal or nearly equal division of properties among the children 
at the death of the possessor. Enormous estates are said to have 
destroyed Italy and the provinces of the Eoman Empire ; but it 
does not follow that tliere should be no estates and no landlords, 
and it is to be feared that Mr. George is giving fatal advice to 
the already sufficiently miserable Irish. Native landlords living 
on their estates and using Irish products would speedily change 
the whole aspect of that island. The abolition of landlords will 
indefinitely postpone her resurrection. 

For the purposes of this discussion an improved farm is as 
much an instrument of production as a power-loom, and so is a 
store in Broadway. The position of this last may be such that 
the land, apart from the building, possesses great exchangeable 
value ; but the totality of such ground rents form but a small 
part of the value of the annual product, — nine tenths of which 
product Mr. George calculates to be due to the efticiency lent to 
labor by capital. Such ground rents are what Mr. Wm. Lucas 
Sargant calls ascending rents. They spring from the im2')rovc- 
mcnt of the productive forces of the community, and in this are 



"PROGRESS AND POVERTY." . H 

totally unlike the descending rents, which may come into exist- 
ence where population presses upon the means of subsistence. 
The former are the accompaniment of national growth and pros- 
perity ; the latter aife an indication of national decay. 

Out of the twenty-four hundred millions' which is assumed 
as having, in 1880, gone in the first place to rent and profits, 
probably one half went for services not issuing in commodities, 
— such as those of actors, artists, barbers, clergymen, clerks, 
copyists, hotel-keepers, dentists, designers, draughtsmen, domes- 
tic servants, civil engineers, gardeners, government officials (in 
taxes), hostlers, intelligence-office keepers, journalists, laundresses, 
librarians, lawyers, managers, musicians, nurses, physicians, pro- 
fessors, restaurant-keepers, teachers, surgeons, and so on. 

The other half must have gone to the butchers, bakers, con- 
fectioners, carriage-makers, furniture-makers, blacksmiths, car- 
penters, tailors, etc., etc., who furnished commodities ; and a little 
reflection will show that less than half of the value of these 
would upon the average consist of raw materials. We have then, 
at most, only six hundred millions consumed by the owners of 
property to the exclusion of the rest of the community ; six hun- 
dred out of seven thousand, which last is, according to Mr. George, 
ten times more than could be produced without capital. This 
includes the cases of all recipients of profits and of all recipients 
of rent, and the tetter includes the rent of improvements as well 
as ground rent. The reader will then see that ground rent, from 
the abolition of which Mr. George expects the return of the golden 
age, is altogether too minute to produce any perceptible harm ; 
while the commission of so stupendous a breach of public faith 
would be likely to lessen the general confidence in the stability 
of individual fortunes, and in this way to diminish the effective 
desire for accumulation which lies at the very foundation of 
national prosperity. 

WAGES INCREASE WITH PRODUCTION. 

We appear, then, to have arrived at the conclusion that more 
than nine tenths of the gross annual product goes directly or in- 
directly to those who labor with the hands or with the head ; 
and this is so near the whole, that, for purposes of comparison. 



12 "PROGRESS AND POVERTY." 

we may say that the great wage fund of the entire community 
is the gross annual product, or, at all events, that in com- 
paring different periods the wages fund is in proportion to the 
annual products. Now the most we could make out for 1840 
was an average of $70 per head for the whole population ; the 
least which seems probable for 1880 is $140 per head. Gold 
may have depreciated since 1840, but not enough to account for 
a quarter part of this difference ; and we are forced to the con- 
clusion that real wages must have risen immensely ; and this 
is what the personal observation of each individual and what 
statistics in detail bear witness to. The question then — 

"Why, in spite of increase in productive power, do wages 
tend to a minimum which will give but a bare living ? " which 
Mr. George propounds as " the riddle which the Sphinx of Fate 
puts to our civilization, and which not to answer is to be de- 
stroyed," — this question appears to have no existence out of his 
imagination. Wages, fees, salaries, emoluments of every kind, 
have risen every ten years. They were higher in 1850 than in 
1840, again higher in 1860, and very much higher in 1880. 
At each period there was more to divide, and every portion of 
the community obtained a larger dividend, — every portion, that 
is, in which no exceptional or temporary causes overcame the 
general swing of financial events. 

The problem, then, for the solution of which Mr. George wrote 
his eloquent book seems not to exist. It appears that wages do 
not tend to a minimum, but that, on the contrary, they are con- 
stantly and steadily increasing if we examine them at consider- 
able intervals and under similar circumstances : it would appear 
that " where population is the densest, wealth greatest, and the 
machinery of production and exchange most highly developed," 
we do not " find the deepest poverty, the sharpest struggle for 
existence, and the most enforced idleness." His proposition is 
universal, and is demolished the moment we compare Ireland 
with England, or Portugal with France, or the farmer of fifty 
years ago with the farmer now, or the domestic servant and 
'longshoreman of those days with the same classes to-day. 



"PROGRESS AND POVERTY." 13 



II. 

But althougli it appears quite certain that all classes who are 
able and willing to work have shared in the great increase of 
opulence which has during the last century resulted from the 
greater security of property and the introduction of machinery 
and the division of employments, still it is equally certain that 
the progress has not been continuous. It has been in waves. 
Each wave has run higher than the last ; but, during the reflux^ 
there has been distress enough to wring the heart of any one 
who observed it at its focus in the poorer quarters of a great 
city. It is in vain to answer that this is a trivial matter com- 
pared to the famines and consequent pestilences that used to 
attend short crops, and that still attend them in nations which 
modern trade prevents from attaining a diversity of occupations. 
It is in vain to point to Ireland and Orissa and Behar and the 
Punjab with their many millions of victims ; for, although we 
have passed from the scene of such horrors, the evil which re- 
mains is great enough to demand that we use every effort to 
discover and remove its causes. 

THE REAL PROBLEM 

would seem to be to ascertain why, during the advance of modern 
society from one plane of opulence to another, there should occur 
periods of depression in which a considerable portion of the 
population suffers want of employment and all consequent evils 
for periods of several consecutive years. 

At the bottom of the whole trouble lie the imperfect informa- 
tion and consequent imperfect judgment of individuals. 

A market, which has been for some time closed, is opened. 
A manufacturing and commercial nation hastens to send goods 



14 "PKOGRESS AND rOVERIY." 

to it. They pay a profit. Then all prudence is cast to the winds; 
immense supplies are poured upon the market and forced upon it 
by long credits and all the devices of trade. The thing is over- 
done. The comparatively agricultural nation has taken vastly 
more than it can pay for in goods. It has to pay in treasure, 
and this sort of trade at last comes to an end ; but not until the 
buying nation has suffered a disarrangement of its machinery of 
exchange which keeps it in a state of paralysis for years. 

We suffered tliis after the war of the Eevolution and after the 
war of 1812-15. 

But there is another field in which the inaccurate judgment 
of men would bring about excitement and subsequent depression, 
even if there were no such thing as trade. 

The efficiency of modern labor springs, in a great measure, 
from the aid given by fixed and floating capital ; and the dis- 
position to save — or to form capital — is stimulated by the 
manifold instruments of convenience and luxury which increas- 
ing opulence bestows. 

AMERICAN CAPITAL AND POPULATION. 

But, in a country like the United States, the desire to save finds 
wide scope. The population, and its effective demand for capital, 
increase at the rate of three per cent annually. If, then, we take 
the value of all capital and of all improvements on land to have 
been $30,000,000,000 in 1880, the average demand for new capi- 
tal and improvements would be to the amount of $900,000,000 ; 
that is, commodities would every y^ar be exchanged, not for other 
commodities, but for labor employed in forming new property, 
to this enormous extent. 

At the commencement of a period of excitement more than 
this would be invested, and with profit ; then more, while the 
prudent shook their heads. But perhaps, nevertheless, a profit 
would ensue ; and so on until the formation of instruments of 
production and convenience is carried beyond the point where 
society can and will pay for their use enough to satisfy the desire 
for profit current in the community. Up to this point there has 
been a greater and greater demand for commodities, and con- 
sequently for labor to form commodities. Now, suddenly, the 



"PEOGRESS AND POVEE-TY." 15 

movement to form more improved frames, more mills, forges, 
machinery, etc., is diminished, and the labor which was forming 
them is set adrift and is unable to consume as largely as be- 
fore ; and so less commodities are required, and less labor to form 
commodities. Here we have a glut, a panic, and a period of 
depression. 

Kent has had nothing to do with the movement except as one 
of the closing effects. As the keener-sighted see that too much 
fixed capital is being formed, they may rush upon real estate as 
a means of securing some income ; and this speculation may run 
very wild, because when A buys B's real estate his doing so 
does not diminish a particle the aggregate of funds seeking in- 
vestment. He simply transfers them to B. But such a specula- 
tion is an effect, not a cause, of the movement which is about to 
culminate in a collapse. This would come to pass just the same 
if real estate were never either bought or sold. 

THE MOTIVE OF GEORGE'S BOOK. 

A collapse of this kind, aggravated by over-importations and 
by a simultaneous contraction of the currency, occurred in 1873, 
and continued in greater or less intensity until 1879 ; and it was 
during these years that Mr. George saw the misery which caused 
him to write his eloquent book. Unhappily, he seems to have 
entirely missed the nature and causes of the disease, and to have 
equally erred in the remedy he prescribed. 

During this period of depression he saw " gaunt Famine side 
by side with the gilded palace," etc. ; but the construction of 
the gilded palace in no way hastened or contributed to the 
collapse. On the contrary, it tended to postpone and moderate 
the collapse ; and the construction of a thousand such at the 
proper moment, accompanied by similar expenditure in other 
directions, might have totally averted the miseries, losses, and 
wreck which filled the period from 1873 to 1879. They could 
not have been averted nor have been postponed for a moment 
by the confiscation of landed property or any other property. 

Let us pass now to what Mr. George has to say about capital. 

Mr. George is particularly unfortunate in his use of the reductio 
ad absurdum. 



16 "PROGRESS AND POVERTY." 

In examining his free-trade notions we have seen him brush 
aside the opinions of Washington, Franklin, Hamilton, Jefferson, 
Jackson — in short, of the majority of the statesmen and people of 
the United States — by a few phrases which to him appeared to be 
a reductio ad absurdum, but which a brief examination showed to 
be only a false syllogism. In writing of "Capital" he dismisses all 
previous political economists, both free-trade and protectionist, in 
a similar manner. He finds their propositions absurd — in hold- 
ing labor to be supported by capital — " because they involve 
the idea that labor cannot be exerted until the products of labor 
are saved, — thus putting the product before the producer," and 
this he repeats several times in different words. Let us put this 
into a syllogism. 

The producer of capital cannot be dependent for support upon 
the subsequent product. 

Labor is the producer of capital, therefore labor cannot be 
dependent for support upon capital ; but labor in the minor 
premise is undistributed, while in the conclusion it is distrib- 
uted. It is a false syllogism. 

The labor which precedes and produces certain capital is not 
the labor which is supported by that same capital, but quite 
another labor. There is nothing absurd in supposing that the 
crops raised by certain labor in 1882 may support and be ab- 
solutely necessary to the support of that other labor which raises 
the crops of 1883. The confusion of thought lies with Mr. 
George, and not with those whom he criticises. 

Through many pages upon " Capital " he labors to show that 
" wages are not drawn from capital at all, but come directly from the 
produce of the labor for which they are paid." But the real wages 
of the laborers are the food, raiment, shelter, etc., for which they 
spend their wages. These are produced before they are used. 
-They are advanced by the capitalist, who is reimbursed only 
^\hen the articles or the property formed by labor are finished 
*' ^ ' '' ' and put upon the market and sold, 

/ A/ That industry cannot exceed the amount which previously ex- 

, A isting means can support, is plain enough ; but in point of fact 

I there always exists in an industrial society sufficient commodities 

j\m *l to carry the community to the next harvest and somewliat beyond. 



/ 



"PROGRESS AND POVERTY." 17 

Industry, then, is not limited by capital, but both it and capital 
are limited by the field of employment. 

Underneath this, and limiting it, lie the desires for the grati- 
fication of which the community, as a whole, will work and save. 
If it desire only bananas and bamboo huts, or mere necessaries, 
it will remain without progress and without wealth. If it desire 
the manifold conveniences, luxuries, and amusements now en- 
joyed in the United States, it will continually work towards the 
attainment of them as increasing skill, dexterity, judgment, and 
capital bring nature more and more under dominion. But at no 
point of time, between the two conditions, has it been true that 
there existed an unlimited demand for any one or for all the 
commodities known to the community. At any given moment 
the demand is limited to such quantity of commodities as can 
be obtained by a given amount of effort ; and it is still further 
limited by the desire to provide for the future, — the desire to 
save. 

Without this desire there can be none of that progress which 
grows from the greater efficiency given to labor by fixed and 
floating capital ; that is, by those instruments of production and 
of convenience which, according to Mr. George himself, enable 
the community to produce a product ten times greater than it 
could unaided. But, at any moment, capital is of limited effi- 
ciency, and demand and supply will award it only a portion of 
that which it adds to the annual product. With a given popu- 
lation and a given ef&ciency of capital the latter cannot be in- 
creased indefinitely. Beyond a certain point a larger amount 
must either rest unemployed, or divide with that before existing 
the same portion of the annual product, — thus diminishing the 
profits of the whole. There is, then, in every industrial com- 
munity, at each point in its development, a limit to the field 
of employment, even if it be in possession of immense unde- 
veloped resources. The English economists generally (and Mr. 
George follows their lead) suppose that there is only one limit ; 
namely, that which is found in a scarcity of land, mines, etc. 
Whether this limit has ever been reached in any existing indus- 
trial community seems doubtful ; that it has not been reached 
in the United States seems quite beyond doubt. 

3 



18 "PROGRESS AND POVERTY." 

It is idle, then, to attribute the fluctuations in amount of 
employment to a deflciency of land brought about by specu- 
lation. 

The normal limit to the field of employment is passed when 
the desire to save forms capital faster than the population and 
its effective demand increases. The excess of employment in 
this direction causes an excess of production of commodities, 
and a farther excess in the employment of what is called pro- 
ductive labor. 

During the corresponding depression employment shrinks be- 
neath its normal limit, and continues less than the average until 
the population has gained upon capital or has changed its habits 
of expenditure. Unemployed capital and labor, during a period 
of depression, are constantly looking for new commodities and 
new services with which to tempt the savers (great and small) 
to increase their expenditure ; the savers, meanwhile, vie with 
each other for the possession of any property which yields a 
sure income ; and those in whom the desire to save is least are 
crowded out and give up trying to accumulate, — until at last it 
begins to be apparent that more fixed capital is needed. Then 
commences another expansion, to be followed, after a longer or 
shorter period, by another collapse. 

The violence of these fluctuations will doubtless diminish 
in proportion as the community obtains correct views of the 
relative magnitude of the industrial forces, — of the amounts of 
fixed and floating capital, — the average quantity of unemployed 
capital in the shape of unsold stocks of commodities and of ma- 
terials awaiting conversion into commodities, etc. ; and, mean- 
while, some considerable mitigation might be afforded if, during 
times of excitement, the general and State and city and village 
governments abstained, as far as possible, from expenditures 
for improvements, and reserved their means for times of de- 
pression. 

To lay all taxes upon real estate would give governments 
enormous revenues during periods of excitement, when to use 
them would be prejudicial, and leave it without a large portion 
of its necessary revenue during periods of depression, when ex- 
penditures would be beneficial. How much could be collected 



"PROGEESS AND POVERTY." 19 

from taxes upon land during periods when land is so depressed 
that mortgaged property sold under foreclosure fails generally 
to pay its debts ? 

CONFUSIONS OF THOUGHT. 

In his chapter on " Capital " Mr. George accuses all past econo- 
mists of confusion of thought ; but his own errors in this respect 
seem to outweigh those of all other writers put together.- 

He thinks it foolish to suppose that the capital produced in 
1882 should support the labor of 1883, but finds nothing un- 
reasonable in saying that the man who is at work upon an 
unfinished steamship "virtually produces the things in which 
he expends his wages." 

But the things for which he expends his wages were createa'i a/j 
hefore he did his work, created by the previous joint efforts of ; ' ^ 
antecedent labor and capital. They belonged to capital, which / Jljr^ 
had furnished the instruments of production and advanced the / 1 

wages and kept the instruments of production in repair. If V 

what remained was more than the profit usual in the commu- 
nity, it would indicate that population had outgrown capital, — 
that more capital was needed. To construct this capital more^ 
labor would be called for, and wages would rise. 

That is, labor (of all kinds) and capital and rent divide 
between them the total gross product. When this increases, 
wages and profits and rents increase. When this diminishes 
they all must submit to a diminution. The proportions of the ' ; ,(. 
gross product which go to one or the other are determined by 
demand and supply. If capital be relatively scarce, capital takes 
a larger percentage ; if relatively abundant, it takes a smaller 
percentage. And so with respect to different classes of the com- 
munity. If any be in excess, it receives a smaller share of the 
annual product ; otherwise, a larger. 

With the increase of the annual product, growing out of more i ^ 
efficient labor and more efficient capital, the totality of wages 
must necessarily advance. If it advance less in any particular 
class it can only be because that class is relatively in excess. 
The amount per head which goes directly to labor of every sort ' 

in 1882 is more than the wliole product of 1840, and the amount 



20 " PROGRESS AND POVERTY. ' 

that goes directly and indirectly to labor of every sort in 1882 is 
double that which went to labor of every sort in 1840. 

Mr. George argues rightly that, at any particular moment, 
industry is not limited by capital, for there are always surplus 
stocks ready to support more labor, and likely to be speedily made 
good by quickened production ; but, indirectly, and in the long 
run, industry is yery much affected by the increasing efficiency 
of capital, for on this depends the magnitude of the total annual 
product, and on this the rewards of industry. To secure this, 
together with a greater diversity and division of employments, 
and to secure to our own labor as large a proportion of the best 
possible field of employment — that, namely, which is found in 
satisfying by our own efforts as many of our desires as possible, 
— was the avowed object of the 

PROTECTIVE POLICY 

as set forth by Alexander Hamilton; and under this policy, 
when thoroughly carried out, we have attained that high rate of 
wages which attracts two thirds of a million of men annually to 
our shores, and which gives us warrant to hope that, before 
population can press upon the means of subsistence in these 
United States, our people wiU have become accustomed to so 
high a scale of living as to ensure the exercise of that prudence 
which will become necessary in the altered conditions of the 
nation. 

Mr. Georoe can see nothing in the policy but a foolish effort 
to make certain classes rich ! 

Few things, however, are so settled in political economy as 
that " no industry can for any length of time obtain a higher 
rate of profit than that which is common in the community." 
If it could, it would be doubly desirable to have those industries 
which might be turned into monopolies within reach, and not 
upon the other side of the Atlantic! Let it be ascertained 
that a monopoly exists among us, — likely to be permanent, not 
likely to be speedily destroyed by internal competition, — and 
the remedy would be the easiest conceivable. A reduction of 
the duty would put the would-be monopolists upon their good 
behavior. But if, upon a false or mistaken cry of monopoly. 



"PEOGKESS AND POVERTY." 21 

we destroy some of our own industries, and transfer the scene 
of monojpoly to foreign shores, we shall be thenceforth without 
remedy. 

The outcry of monopoly as to industries easily inaugurated by 
moderate amounts of capital is generally passed over as the 
product of insincerity; but Mr. George is above suspicion in 
this respect. He writes what he believes. 

We come now to what he has to say about the Malthusian 
Doctrine. 



22 "PROGRESS AND POVERTY." 



m. 

Mr. George quotes as follows from Mr. John Stuart Mill: — 

" A greater number of people cannot, in any given state of civiliza- 
tion, be collectively as well provided for as a smaller. The niggardli- 
ness of nature, not the injustice of society, is the cause of the penalty 
attached to over-population. An unjust distribution of wealth does not 
aggravate the evil, but, at most, causes it to be somewhat earlier felt. 
It is in vain to say that all mouths which the increase of mankind call 
into existence bring with them hands. The new mouths require as 
much food as the old ones, and the hands do not produce as much. If 
all instruments of production were held in joint property by the whole 
people, and the produce divided with perfect equality among them, 
and if in a society thus constituted indnstri/ was as energetic and the 
produce as ample as at the present time, there would be enough to make 
aU the existing population extremely comfortable; but when that 
population had doubled itself, as with existing habits of the people it 
undoubtedly would in little more than twenty years, what would then 
be their condition 1 Unless the arts of production were in the same 
time improved in an almost unexampled degree, the inferior soils which 
must be resorted to, and the more laborious and scantily remimerative 
cultivation which must be employed on the superior soils to procure 
food for so much larger a population, would, by an insuperable neces- 
sity, render every individual in the community poorer than before. If 
the population continued to increase at the same rate, a time would 
soon arrive when no one would have more than mere necessaries, and 
soon after a time when no one would have a sufficiency of those, and 
the further increase of the population would be arrested by death." 

To this Mr. George replies : — 

" All this I deny. I assert that the very reverse of these propositions 
is true. I assert that in any given state of civilization a greater 



"PKOGKESS AND POVERTY." 23 

number of people can collectively be better provided for than a smaller. 
I assert that the injustice of society, not the niggardliness of nature, is 
the cause of the want and misery which the current theory attributes 
to over-population. I assert that the new mouths which an increasing 
population call into existence require no more food than the old 
ones, while the hands they bring with them can, in the natural 
order of things, produce more. I assert that, other things being 
equal, the greater the population the greater the comfort which an 
equitable distribution of wealth would give to each individual. I 
assert that, in a state of equality, the natural increase of population 
would constantly tend to make each individual richer instead of 
poorer. 

" I thus distinctly join issue and submit the question to the test of 
facts." 

Now, let ns look at his facts. They are these : That, in our 
times, communities have increased faster in wealth than in 
population ; that it is in the densest populations we find " costly 
buildings, fine furniture, luxurious equipages, statues, pictures, 
pleasure-gardens, and yachts, men of income and of elegant leisure, 
thieves, policemen, menial servants, lawyers, men of letters, and 
the like; and that capital overflows for remunerative investment 
from these densely populated to sparsely populated regions." 
These things, he says, "conclusively show that ivealth is the 
greatest where population is densest ; that the production of 
wealth to a given amount of labor increases as population in- 
creases." 

But these things do not prove the contradictory of Mr. Mill's 
propositions. Mr. Mill would not deny that, in coimtries so greatly 
underpeopled (having regard to the existing skill and knowledge 
of mankind and the available land) as were our colonies when, 
as Adam Smith relates, a widow with half a dozen children was 
looked upon as an heiress, — he would not deny that in such cases 
a mere increase of population would bring increase of wealth. 
Mr. Mill was speaking of communities in which to support a 
widow who had six children would be a good deal more difficult 
than to support a widow without any ; and, with respect to such, 
he says that a great increase of population would bring great 
misery, unless, at the same time, the arts of production were 



24 "PROGRESS AND POVERTY." 

improved in an almost unprecedented degree. This, Mr. George 
thinks, he disproves by adducing the experience of the last forty 
years, in which the arts of production have been improved in an 
almost unprecedented degree. 

Wealth has increased in consequence of these improvements, 
— not in consequence of the greater population. The greater 
wealth and the greater population are joint effects ; or rather the 
improvements brought greater wealth, and this brought greater 
density of population. This answers his point as to the general 
advance in wealth and population in our times. With respect 
to the comparison he draws between countries now underpeo- 
pled, — those in wdiich that density of population which can be 
maintained to the best advantage with the skill and the pro- 
ductive instruments known in our time has not been reached, — 
it is quite true that greater wealth would ensue from greater 
population up to a certain not very well defined point. More 
capital can be used to advantage as population increases ; the 
steamship and the railroad become paying instruments where be- 
fore they could not be used, and capital speedily appears, either 
from home savings or from other communities, when the condi- 
tions exist for its safe and paying investment. And with the 
application of more capital comes the possibility of satisfying new 
desires, — the desires for " costly buildings, fine furniture, luxuri- 
ous equipages, statues, pictures, pleasure-gardens, yachts, elegant 
leisure, protection by means of police, menial servants, instruction 
in the law, in religion, in literature, and the like on the part of 
the rich, and for better food, better clothing, better houses, better 
schooling, and more amusements on the part of the rest of the 
community." 

It is the existence of those desires and the possibility of grati- 
fying them that leads to the accumulation of those instruments 
of production of which Mr. George himself says : — 

" If the farmer must use the spade because he has not capital enough 
for a plough, the sickle instead of the reaping-machine, the flail instead 
of the thresher ; if the machinist must rely upon the chisel for cutting 
iron, the weaver on the hand-loom, and so on, — - the productiveness of 
industry cannot be a tithe of what it is when aided by capital in the 
shape of the best tools now in use." 



"PEOGEESS AND POVEETY." 25 

Well, then, these instruments of production, which do nine 
tenths of the work, can be brought into existence and kept in 
repair only by abstinence. Somebody must save what he other- 
wise would have squandered in present enjoyment. Instead of 
orgies with boon companions he prefers to improve his farm, 
to buy better tools, to build a mill, etc. The instruments of 
production into which he transforms his savings are part of 
those which increase tenfold the gross products to be divided. 
He is clearly entitled to some portion of the increase his savings 
have effected : what that portion shall be will be decided by per- 
fectly impartial umpires, — demand and supply. If of any one 
kind of the instruments of production there are less than the 
community can use to advantage, the rent for their use will be 
high, the profits to be derived from constructing more will be 
great, and many will be constructed; until at last there will 
come into existence as many as will command such annual rent 
or equivalent profit as will satisfy the existing effective desire 
for accumulation. If he cannot get income enough from his 
instruments of production to make it worth while to save in 
this shape, he will form instead instruments of convenience : he 
will improve his dwelling-house or build a new one ; or, aban- 
doning saving, he will use better food, better clothing, go oftener 
to the shows or the play ; and if he be rich, he will call together 
a number of carpenters, masons, and other artificers, and build 
him a " gilded palace." In building this he will pass over to 
the artificers a portion of the annual product which came to him 
as rent for his part of the community's property, and the artificers 
will eat it and drink it, and put it into clothing, or obtain some 
amusement with it, or put a portion in the bank. Every particle 
of the value of the gilded palace and its luxurious furniture will, 
when it is finished, have passed into the hands of labor, and the 
greater part of it will have been consumed by those who were 
able and willing to work. Thereafter the gilded palace will 
stand as a striking witness to the fact that in some previous 
year or years there were funds which could be devoted to un- 
productive purposes. The totality of such costly edifices, yachts, 
etc., which existed in San Francisco in 1879 were the accu- 
mulations since 1849. They struck the eye and excited the 

4 



26 "PROGRESS AND POVERTY." 

imagination, and they led Mr. George to very erroneous con- 
clusions. 

Mr. George says : — 

" There is no necessity for abstract reasoning. The question is one 
of simple fact. Does the relative power of producing wealth decrease 
with the increase of population 1 " 

But lie wishes to establish the universal fact that the produc- 
tion of wealth increases faster than population. This he en- 
deavors to prove by inferences from other facts, — that is, by 
abstract reasoning. He could not do it in any other way, except 
by appealing to statistical facts, and is therefore not to blame 
for the method. What he appears to err in is the way in which 
he applied his method. He looks at a very sj^arsely peopled 
community, and sees that in it a canoe is a more suitable instru- 
ment than a steamer, a common road than a railroad ; that, in 
short, there is a limit to the application of modern devices in 
that community. With a greater population, more capital could 
be applied ; and, to a certain point, with increase in the annual 
product as compared with the population. Where he errs is 
in concluding that what is true to a certain point is true indefi- 
nitely. He is so sure of this that he instances California. He 
says: "In 1849, $16 a day were only ordinary wages. Now, 
men are glad to work a week for that sum, and money is loaned 
by the year for what would not have hardly been deemed extor- 
tionate by the month." But, strange as it may seem, Mr. George 
does not think that wages are lower because labor yields less 
wealth. He says : — 

" On the contrary ! Instead of the wealth-producing power of labor 
being less in California in 1879 than in 1849, I am convinced that it 
is greater ; and it seems to me that no one who considers how enor- 
mously during these years the efficiency of labor in California has been 
increased by roads, wharves, flumes, railroads, steaniboats, telegraphs, 
and machinery of all kinds, — by a closer connection with the rest of 
the world, and by the numberless economies resulting from a larger 
population, — can doubt that the return which labor receives from nature 
in California is on the whole much greater now than it was in the days 
of unexhausted placers and virgin soil ; the increase in the power of 



"PEOGRESS AND POVERTY." 27 

the human factor having more than compensated for the decline in the 
power of the natural factor. That this conclusion is the correct one 
is proved by many facts that show that the consumption of wealth is 
now much greater, as compared with the number of the laborers, than 
it was then. Instead of a population composed almost exclusively of 
men in the prime of life, a large proportion of women and children are 
now supported, and other non-producers have increased in a much 
greater ratio than the population ; luxury has grown far more than 
wages have fallen; where the best houses were cloth and paper 
shanties are now mansions whose magnificence rivals European 
palaces ; there are liveried carriages on the streets of San Francisco, 
and pleasure yachts on her bay ; the class who can live sumptuously 
on their incomes has steadily grown ; there are rich men beside whom 
the richest of the earlier years would seem little more than paupers, — 
in short, there are on every hand the most striking and conclusive evi- 
dences that the production and consumption of wealth have increased 
with even greater rapidity than the increase of population, and that if 
any class obtains less it is solely because of the greater inequality of 
the distribution." 

This quotation is an example of the eloquence with which Mr. 
George states his conclusions, and of the unwariness with which 
he adopts them and considers them proved. 

Wages had fallen to one sixth, and the interest upon capital 
to nearly a twelfth ; yet he thought the annual product must 
certainly be greater per man than it was in 1849 ! One would 
think he would have asked, If this be so, what becomes of it ? 
Eent, profits, and wages must take the whole ; and rent and 
profit again spend nearly the whole of their shares upon wages. 
How, then, could it be that wages had fallen to one sixth part of 
what they were ? Having come to this question, it must have 
occurred to him to look into the census of 1870 and see what 
were the earnings of labor and capital, — that is, the gross prod- 
uct out of which the share of rent must come. Looking into 
this, he would have found that the value of all farm products, 
including betterments and additions, was $50,000,000, and that 
the number of hands employed was forty-eight thousand, giv- 
ing $1,040 a year to each ; or, dividing by three hundred days, 
$3.50 a day. Turning now to mining, he would have found the 



28 "PKOGRESS AND POVERTY." 

gross product $8,300,000, and the hands employed seventy-six 
hundred, giving to each $1,090 a year, or $3.60 a day. Turning 
again to manufactures, he would have found the gross product 
$68,000,000, the materials being $27,000,000, leaving $31,000,000 
as the value added to materials by forty- nine thousand persons ; 
giving $633, or $2.11 a day. 

The agricultural and mining gross products included of course 
more rent, and the manufacturing less rent ; but they all three 
contained funds which went to non-productive labor, — that is, 
to the seventy-six thousand persons who were engaged in pro- 
fessional and personal services. The thirty-three thousand per- 
sons engaged in trade and transportation could hardly have much 
increased the average. We will call their earnings $4 a day, or 
$1,200 a year, for each person, or $39,000,000 altogether. 

We have, then, 

48,000 persons engaged in agriculture and producing . $50,000,000 

7,600 in mining, producing 8,300,000 

49,000 in manufacturing 31,000,000 

33,000 in trade and transportation 39,000,000 

76,000 in professional and personal services .... 

213,600 ^128,300,000 

We have, then, $128,300,000 to be divided among two hun- 
dred and thirteen thousand six hundred persons, or just about 
$600, or $2 a day against $16 a day, earned by each man in 
1849. 

Nobody supposes that the census enumerations are absolutely 
exact, but on the other hand nobody believes that they err by 
fifty per cent ; and it will be seen then how wild, beyond belief, 
were the conclusions which Mr. George considered proved by his 
method of reasoning. 

He believed that labor, assisted by capital, was earning in 
California over $16 a day ; and his book would tend to make 
the laborer feel himself wronged if he did not receive that amount. 
But all that labor and capital together earned was about $2.11 
a day, as shown by the statistics of manufactures ; and out of 
this and the shares of rent in agriculture and mining, the per- 
sons engaged in professional and personal services had to be 
supported. 



"PEOGRESS AND POVERTY." 29 

With, the total annual product, such as it was, the laborers 
could not possibly have had more than they obtained ; and it is 
a pity they and their innumerable well-wishers in other classes 
should have been disquieted by Mr. George's generous and elo- 
quent but exceedingly inaccurate reasoning. 

Analyzing Massachusetts in the same way as California, we 
find: — 

Engaged in agriculture 73,000 with products worth .... $32,000,000 

Engaged in manufactures 279,000 " " "$554,000,000 

Deduct materials 334,000,000 220,000,000 
Engaged in mechanical \ 

and mining ^ 14,000 \ Supposing these to 

occupations ) f earn as much as those 

Engaged in trade and \ C engaged in manufac- 

transporta- > 83,000 ) turing ........ 76,000,000 



tion 






$328,000,000 



Engaged in professional \ 

and personal \ 131,000 
services ) 



580,000 persons, among whom $328,000,000 being 
divided gives $566 a year, or $1.89 a day. 

But the estimates in Massachusetts were in currency, which 
was at 15 per cent discount, so that the daily earnings in that 
State come down to $1.61 against $2 in California. With all 
her machinery, and all the economies resulting from a denser 
population, Massachusetts in 1870 could not divide among her 
workers as much as thinly settled California. 

And here we come to a distinction as to the wealth of States, 
which seems nowhere present to the mind of Mr, George. 

A State may possess a vast accumulation of public and pri- 
vate edifices, and a vast aggregate of tools, machinery, mills, etc. 
These strike the eye and impress the imagination forcibly. The 
beholder infers at once that he is in an enormously rich com- 
munity, and his next inference is that in such a community the 
wages of labor ought to be very high. It seems as if where there 
was so much visible wealth every one ought to have a great abun- 
dance. But the value of these visible portions of wealth has 
already been consumed once. At the time of their construction, 
nearly every cent of their cost passed directly or indirectly into 



30 "PROGRESS AND POVEUTY. 

the hands of some kind of laborer. They have been eaten up 
once ; they cannot be eaten up again. All that they can hereafter 
be made to contribute is that which their assistance adds to the 
annual product. This is every year divided between rent, labor, 
and capital, in such portions as demand and supply determine ; 
but the part which goes to rent and capital nearly all, as we 
have already seen, goes (through the hands of the landlords and 
capitalists) to labor. 

What, then, can be annually divided among the members of 
a community is the annual product of commodities; and that 
nation is the wealthiest which can give to each of its members 
the largest amount of the " necessaries, conveniences, and luxu- 
ries of life." This dividend bears no necessary proportion to the 
visible accumulated . property, which is the result of the savings 
of many years, and which may have much, or may have very 
little, influence upon the annual product. 

The repeated references of Mr. George to the magnitude of 
these accumulations, as showing what ought to be, or could pos- 
sibly be, the annual reward of labor, — these are at the bottom 
of much that is misleading in his book. 

Mr. John Stuart Mill, as every one knows, was a person of the 
highest integrity, a great logician, as much interested in the fu- 
ture fate of the poorer classes as any man who has lived in our 
times. His positions, as quoted in tlie beginning of this chapter, 
seem not to have been shaken by Mr. George in the slightest 
degree. 

We have now gone through the first two books of " Progress 
and Poverty," and have found what appear to be good reasons 
for dissenting from every one of his distinctive doctrines. 

It appears that wages do not tend to decrease as wealth (in the 
sense of the gross annual product as compared with population) 
increases, but that, on the contrary, wages increase ^jari passu 
with wealth. It appears that although productive labor, when 
employed, adds generally, by the assistance of capital, a value 
which is greater than its wages, still this value is not available 
until the product is finished and put upon the market and sold, 
so as to give a general purchasing power. It seems, therefore, 
that wages are certainly advanced by capital, without which the 



"PEOGKESS AND POVERTY." 31 

greater portion of the work of industrial communities could not 
be carried on. It appears that under favorable circumstances 
population does increase as rapidly as Malthus and Mr. Mill 
declared ; and although, with increasing skill and capital to the 
very extraordinary extent that has been seen in our days, the 
annual product in the United States has increased much more 
rapidly, and so led to an equal advance in wages, still it is by no 
means certain that improvements can continue indefinitely at 
the same rate. 

We see that the same causes have not produced an equal 
advance in wealth and wages in older communities, and we see 
that in California there has been a very marked decline. It 
seems probable, then, that in the course of another century, or 
half a century, population with us will press upon the means of 
subsistence. It is the hope of protectionists that the high scale 
of living which has been established in the meanwhile will pre- 
vent the descent of any large class of the people to transatlantic 
poverty. Mr. George sneers at protection as being contrived and 
intended to favor monopolies ; but this is as untrue, as offensive, 
and as unjust as it would be to stigmatize him as a selfish com- 
munist and demagogue, whose only aim was notoriety. This is 
not true ; neither is that. 



32 "PROGRESS AND POVERTY." 



IV. 

How to deal with the remaining chapters of "Progress and 
Poverty " without wearying the reader is " the riddle which the 
Sphinx of Fate puts " to the reviewer, and which not to answer 
is — not to be read ! The fallacies are so numerous tliat to reply 
to each in full would be to exceed reasonable limits. All that 
can be done is to take the principal ones seriatim, and get rid of 
each as speedily as possible. 

He says that one thousand men working together will do much 
more than one thousand times the work of one man. 

This is true when they have unlimited subject-matter to work 
upon. Double the population of the United States, and all might 
be better off. Would they be better off if multiplied by a thou- 
sand ? Up to a certain point the mutual helpfulness of men 
outweighs the relative but not absolute scarcity of materials, 
such as land, mines, etc. ; but only up to a certain point. He 
makes the old error of arguing " a dido secundum quid ad dic- 
tum simpliciter:' This is all ihat there is in his argument, that 
the joint product of labor and capital continually increases faster 
than population increases, and that therefore the laborer must be 
robbed if in a densely peopled country he earns less than the 
wages usual where lands, mines, forests, etc., are more abundant. 

He repeats that capital does not employ labor, but that labor 
employs capital, and adduces in proof the fact that capital was 
originally formed by labor ; but when the first capital was being 
formed few could exist upon a given space, and society bore no 
analogy to present communities in which, according to his own 
dictum, nine tenths of the product is due to the assistance of 
capital. 



"PKOGEESS AND POVEETY." 33 



KENT AND CAPITAL, 

He asserts that " rent is the price of monopoly, arising from 
the reduction to individual ownership of natural elements which 
human exertion can neither produce nor increase." But human 
ao-ency has already vastly increased their capacity and can in- 
crease it still farther ; ten acres with sufficient capital will yield 
as much as fifty withoiit. Eent, then, is kept in check by capi- 
tal. Moreover, he would have us believe that rent has actually 
swallowed up much that belonged to labor in the United States, 
and that to this cause we must trace the panic of 1873. Now, 
with respect to Economic Ground Eent, there seems reason to 
doubt whether it has begun to exist in the United States, as far 
as the great mass of farms and plantations are concerned ; there 
seems, indeed, reason to believe that the farms do not yield a 
full interest upon the mere improvements existing upon them. 
The formation of this particular kind of instruments of produc- 
tion has been over-stimulated by our homestead laws, and by the 
action of that very common desire of men to acquire an absolute 
right to a portion of land and to be each his own master, with a 
certainty, as nearly complete as possible, of never being in want 
of food and seldom in want of a moderate amount of conven- 
iences and luxuries. 

The competition of seven millions of individual farmers ought 
surely to be a sufficient guarantee against monopoly ; they will 
not even obtain a fair return for the labor they have spent in 
improvements, until increasing population and the action of the 
protective system build up a sufficient market for their products. 
Free trade, by forcing them to offer a greatly increased quantity 
of raw products to the outer world, would infallibly, under exist- 
ing conditions, reduce very mucli the exchangeable value of their 
produce, and impoverish them for several generations. 

It appears evident, then, that the panic of 1873 could not have 
been brought about by a scarcity of raw products. Many mil- 
lions of farmers — each with more land than he habitually used, 
each eager to raise more when prices warranted — were a suffi- 
cient guarantee against any such catastrophe. 

5 



34 "PKOGEESS AND POVERTY." 

But it may be said, " There are the rents of houses and stores 
in the cities ; these become exorbitant and make the production 
of something or other too expensive, and so something or other 
is not made, and hence we have a diminution in the aggregate 
demanel." 

But this idea is contradicted by the facts, well known to prac- 
tical men, that during a period of excitement real estate is one of 
the last things to rise, and that when a period of depression comes 
it is one of the last to fall. The facts are empirical, and so may 
be questioned until we discover a reason for them. This is not 
far to seek. People do not enlarge their quarters until they have 
experienced high wages and high profits for some time, — until, 
in fact, they have got used to them, and have come to consider 
them as practically permanent. The individual takes a larger 
house or more rooms because he feels he can afford it, and he 
takes more space for the accommodation of his business because 
he feels that an increasing business demands more, and that, after 
paying more rent, he will have a larger sum left at the end of 
the year. High rents in the cities appear to be a consequence of 
the fuller occupation of the population ; and even if, towards the 
end of a period of excitement, they become so high as to materi- 
ally affect the profits and consequent expenditure of a portion of 
the dealers, they can only transfer to the owners of houses and 
lands the very same sums that are taken from the dealers, and 
the recipients must in their turn either spend them or save 
them ; and in saving they spend only upon different people. It 
is only when it begins to be seon that saving has been overdone, 
— that more instruments of production and convenience cannot 
be formed with a chance of their yielding the rate of profit usual 
in the community, — it is only then that the industrial move- 
ment begins to decrease. Then laborers are thrown out of 
employment, and with this comes a diminished demand for 
commodities and a necessity for dismissing still more laborers, 
and so on in a widening circle. 

RENT NOT RESPONSIBLE FOR PANICS AND POVERTY. 

In a country depending largely upon the export of manu- 
factured goods, like Great Britain, a panic may be brought 



"PROGRESS AND POVERTY." 35 

about by a failure of the crops of some of her principal pur- 
chasers, and a consequent inability to buy ; but this does not 
arise from extravagant rents in either country. 

Again, in a country which exports largely of raw products, a 
period of depression might be brought about by large crops and 
low prices in some other part of the world ; but here again rent 
has nothing to do with the matter. 

Mr. George appears, then, to have failed in his attempt to fix 
upon rent the responsibility for panics. That rent is not the 
cause of general poverty in the United States is apparent enough 
from the fact that if from the Gross Annual Product of 1880 
per head we subtract the whole of rent and the whole of profits, 
there remains much more than the whole product per head 
of 1840. That is, labor alone in 1880 took more than labor, 
rent, and profits together took in 1840. And besides this, rent 
and profits again spent three quarters or more of their share 
upon labor. 

His algebraical formula, then. Produce = Eent + Wages + In- 
terest, therefore Produce — Eent = Wages + Interest, proves 
nothing. We should rather say, Produce — Eent + Wages + In- 
terest ; therefore Produce — (Wages and Interest) = Eent. As 
long as men and capital, taking the whole country together, are 
scarcer than land, they must be paid first, and rent must take 
what they leave. When, in the far future, men and capital are 
the more plenty, and land the less, then, and then only, wiU his 
interpretation of the formula be true. But when, if ever, we 
approach such a point, it is fair to expect that a population 
long accustomed to convenienees and luxuries will exercise suffi- 
cient self-restraint to prevent the loss of them. 

There are two cases in which the rent of land, and the rent of 
capital also, become oppressive and the source of poverty. One 
is when the owners are absentees. This case Mr. George recog- 
nizes. The other is when the owners, instead of buying their 
conveniences and luxuries of their fellow-citizens, buy them 
abroad. This case Mr. George entirely ignores. But this is 
semi-absenteeism. If, for instance, rent and profits together 
receive in the United States twenty-four hundred millions out 
of seven thousand millions annual product, in consideration of 



36 "PKOGRESS AND POVERTY.' 

the use by the rest of the community of their land and capital, 
and if they proceed immediately to redistribute three fourths or 
more of the twenty-four hundred millions to other classes of the 
community, we speedily come to have vast masses of men who 
are engaged in producing conveniences and luxuries and ser- 
vices, and who bring conveniences and luxuries to the doors of 
those who produce necessaries. 

But if the owners of land and of capital were allowed to send 
their twenty-four hundred millions abroad after cheap conven- 
iences and luxuries, the inevitable effect would be to break 
down the foreign market for our raw products, to make what we 
did buy exceedingly dear instead of cheap, and, in the end, to 
limit us to a small portion of what we now have by our own 
direct industry. A vastly diminished gross annual product would 
ensue, and rents, profits, and wages all suffering together, an im- 
poverished people would no longer be able to support the stately 
universities that are now in league with the Cobden Club to 
destroy our industries. 

It is not charged that the colleges are doing this intentionally ; 
but their good intentions cannot alter the result. 

Mr. George draws a picture of the growth of a village into a 
city, and tells us what " some hard-headed man of business, who 
has no theories, but knows how to make money," would say if 
he were assured that the village would in ten years become a 
city. He would say, " Go and buy lands and you will be rich." 
But if some one thinking, not knowing, that the village would 
become a great city, should psk the advice of the same hard- 
headed business man, he would reply, — 

" Speculation in land is an exceedingly unsatisfactory business in 
the aggregate. If your village become a great city in ten years, and if 
your land happen to be in the right path of it, you may become rich 
without any exertion on your part ; but where one man judges cor- 
rectly, fifty judge wrong, and find at the end of twenty or thirty years 
their piece of land worth very much less than what the first price of it 
would have groAvn to if placed at interest. Land speculation is a great 
lottery, and has an inordinate number of blanks. When a man or a 
family draws a prize, aU the world knoAvs of it. When he draws a 
blank, he keeps it to himself." 



"PKOGEESS AND POVEKTY." 37 

Mr. George says : — 

" In the city where I write is a man — but the type of men every- 
where to be found — who used to boil his own beans and fry his own 
bacon, but who, now that he has got rich, maintains a town house that 
takes up a whole block and would answer for a first-class hotel, two 
or three country houses with extensive grounds, a large stud of racers, 
a breeding farm, private track, etc., etc. It certainly takes at least a 
thousand times, it may be several thousand times, as much land to 
maintain this man now as it did when he was poor." 

But the question is not how much land he keeps vacant. That 
can be of no consequence in a State which has but two or three 
persons to the square mile. What we have occasion to know is 
what portion of his income he can or does keep the rest of the 
community out of. His houses and the improvements of his 
pleasure-grounds have been paid for years ago to labor. They 
do not form any portion of his annual expenditure. His stud of 
racers is the only great expense which does not almost entirely 
go to labor at once ; and much of this does. So does the greater 
part of the additional expenditure for more delicate food. The 
longer you look at it the more improbable does it appear that he 
does or can keep the rest of the community out of a tenth part 
of his income, even counting in all that he pays for foreign com- 
modities. 

But more important than all this is the bad logic of calling 
this man "a type of men found everywhere." 

How many out of the seven millions of land-owners and as 
many more capitalists in the United States keep studs of horses ? 
What has such a man as this or a hundred such to do with the 
general sweep of the nation's life ? 

FREE TKADE NOT THE CAUSE OF PROSPEEITY. 

Mr. George says that "free trade has enormously increased 
the wealth of Great Britain ! " 

Other events, more especially the discovery of Californian and 
Australian gold, occurred about the time she entered upon the 
career of free trade, and those events have caused a general ad- 
vance in wealth among industrial nations ; but as protectionist 



38 "PROGRESS AND POVERTY." 

France and the United States have advanced much more rapidly 
than Great Britain, it is not easy to see what free trade has 
had to do with it. It is the policy of England to exaggerate her 
prosperity, and to impute it all to free trade. But if it were 
even so, the outside barbarians would inquire what free trade 
had done for India, Japan, Turkey, Ireland, etc. If it has ben- 
efited Great Britain, if it has not even made the advance of her 
prosperity less than it would otherwise have been, the other 
parties to the exchanges made by her show no signs of having 
shared in the profits. 

LABOR PROFITS BY IMPROVEMENTS. 

At page 225 Mr. George gives what he considers a demon- 
stration that any and all improvements ermre to the advantage 
of rent, and in no way benefit the laborer. 

He supposes that population remains the same, but that im- 
provements in production take place so as to 

"reduce by one tenth the expenditure of labor and capital neces- 
sary to produce the same amount of wealth. Now either one tenth of 
the labor and capital may be freed, and production remain the same as 
before ; or tlie same amount of labor and capital may be employed, 
and production be correspondingly increased. But the industrial or- 
ganization, as in all civilized countries, is such that labor and capital, 
and especially labor, must press for employment on any terms. The 
industrial organization is such that the mere laborers are not in a posi- 
tion to demand their fair share in the new adjustment, and that any 
reduction in the application of labor to production will, at first at 
least, take the form, not of giving each laborer the same amount of 
produce for less work, but of throwing some of the laborers out of 
Avork and giviug them none of the produce. ISTow, owing to the in- 
creased efficiency of labor secured by the new improvements, as great 
a return can be secured at the point of natural productiveness repre- 
sented by eighteen as before at twenty. Thus the unsatisfied desire 
for wealth, the competition of labor and capital for employment, would 
insure the extension of the margin of production, we will say to eigh- 
teen, and thus rent would be increased by the difference between eigh- 
teen and twenty, while wages and interest in quantity would be no 
more than before, and in proportion to the whole produce would be 



"PROGRESS AND POVERTY." 39 

less. There would be a greater production of wealth, but the land- 
owners would get the whole benefit (subject to temporary deductions, 
which, will be hereafter stated)." 

Possibly this might happen in a country where, as in Ireland, 
landlords were in the habit of sending abroad for their con- 
veniences and luxuries and exporting raw products to pay 
for them; but in a country like the United States, where 
the whole population is accustomed to many conveniences and 
luxuries, produced for the most part by our own labor and 
capital, the result would be very different. The .moment an}'- 
additional labor was applied to the land there would be an over- 
supply of raw products ; and the exchangeable value of these, as 
compared with highly finished commodities composed largely of 
labor and capital, and as compared also with services, would 
decline. There would be an increased demand for services not 
issuing in commodities, and an increased demand for conven- 
iences and luxuries on the part of the whole community. Labor 
and capital would be turned to the production of these, and the 
end of it all would be a community consuming the same abun- 
dance of necessaries as before, and a much greater abundance of 
conveniences and luxuries. 

If, before the change, rent and profits took one third of the 
product and again distributed three quarters of that third to 
labor for services and for commodities, then rent and profits 
would not be likely to retain any greater share of the increased 
product after the change, for the demand of rent and profits for 
raw materials was already satisfied before. 

It would seem then that, so far from the whole increase going 
to rent, eleven twelfths of it would go to labor, and part of the 
other twelfth would go to capital, and a part of the remainder 
would be rent of improvements and not at all ground rent. By 
labor is here meant every kind and description of labor, both 
that with the head and that with the hands. The annual prod- 
uct pays them all, and those get the largest share who are the 
least numerous as compared with the demand for their work. 

Wherever, then, the productive efficiency of the population 
becomes greater per head it would seem that wages must in- 



40 "PEOGEESS AND POVEETY." 

crease, whether the greater efl&ciency spring from augmented 
skill, or more abundant capital, or from the mutual helpfulness 
and greater economies which attend a greater density of popula- 
tion. If these advantages continued to increase indefinitely, as 
Mr. George imagines, then wages would increase indefinitely 
bvit, unfortunately, greater numbers upon a given space and 
with given skill and capital come at last to press upon the 
means of subsistence ; and then, however disagreeable it may 
be to face the fact, the only recourse by which the population 
can avoid increasing poverty is to avoid increase in numbers. 

All the eloquence in the world, all the passionate declarations 
that such an opinion impeaches the goodness of God, etc., will 
not change the disagreeable fact. It is just as well to admit 
it and act accordingly ; and this is exactly what every working- 
man does who considers before he marries whether he can or 
cannot support a family and bring up his children so that they 
will be good and useful and happy members of society. 

Mr. George in effect tells this good citizen to make no such 
calculations ; that, in all cases, there comes with each additional 
pair of hands a more than equal means of production : but Mr 
George's conclusions, though inspired by a very good heart, are 
arrived at by a very bad logic, and he gives fatal advice, which 
can only impoverish and destroy those whom he desires to lift up 
and enrich. Up to a certain 2Joint each additional pair of hands 
increases the average production ; heyond a certain point it is 
diminished. No one who dispassionately reflects upon this 
matter for an hour can be in any doubt with regard to it. 

The next and last chapter will be devoted to what Mr. George 
has to say about the wickedness and impolicy of individual 
property in land, etc. 



PROGRESS AND POVERTY." 41 



V. 

We now come to Mr, George's views as to justice. He says : — 

" If we are all here by the equal permission of the Creator, we are 
all here with an equal title to the enjoyment of his bounty, — with an 
equal right to the use of all that nature so impartially offers." 

Afterwards he says : — 

" Though the sovereign people of the State of New York consent to 
the landed possessions of the Astors, the puniest infant that comes 
wailing into the world, in the squalidest room of the most miserable 
tenement-house, becomes at that moment seized of an equal right with 
the millionnaires. And it is robbed if the right is denied." 

Many intelligent readers, who are not afflicted with a little 
knowledge of formal logic, but who retain, unimpaired, their 
natural common-sense, will see at a glance that the above pas- 
sages contain a vast amount of rhetoric. It is assumed that the 
value of land of these United States is the product of nature ; 
but nearly the whole of it is the product of capital slowly ac- 
quired by self-denial. Mr. George himself estimates that of the 
present annual product nine tenths are due to the efficiency 
which capital lends to labor. Take away then the capital, — 
take away the farm improvements, the tools, the mills, the 
machinery, the forges, the houses, etc., and it would seem that a 
very large portion of the population must perish. They do not 
perish, because those who have gone before have labored and 
saved. But for this antecedent labor and thrift no piece of 
ground would command any rent. The whole value then would 
seem to belong of right to those who are here. 



42 "PROGRESS AND POVKRTY." 

We welcome annually to our shores, it is true, nearly a mil- 
lion of persons, — from every nation that will assimilate with 
us and adopt our habits, — feeling that there is still room enough 
for many more. But what would the people of the United 
States think if each of these immigrants, not satisfied with an 
equal chance to share in our opportunities to labor to advantage, 
should, upon landing, claim for every man, woman, and child 
a ^Jro rata right to the land of the country ? 

The contrast which Mr. George avails himself of, between the 
puny infant and a wealthy millionnaire, is rhetorical in the high- 
est degree. It appeals at once to our natural and laudable com- 
passion for the poor, and to our natural but not laudable envy 
of the rich. To pillage the latter and pass the plunder over to 
the former, gratifies at once two strong passions. But how if, in 
thus gratifying our blind inclinations, we should miss our aim, 
and prevent that development of society to which alone the 
puny infant can look for a chance of unfolding its faculties and 
rising 'in the world ? How if, in robbing the rich, we rob a 
thousand times as many deserving persons who cannot afford to 
be robbed ? 

RENT NOT MONOPOLY. 

Let us look at some illustrations which, if a little rhetorical 
in the opposite direction, are still many times nearer the true 
statement than is that of Mr. George. 

Here is a brave-hearted woman, sixty years old, left destitute, 
with three children, long years ago. With thrift, intelligence, 
and self-denial, she faced the world. She saved, after many 
years, a few thousand dollars. She bought a house in a city, 
paying half the cost, and being able, upon its security, to raise the 
other half upon mortgage. She has denied herself fine clothing, 
amusements, — every kind of unthrift. She has brought up her 
children to be good members of society. She has barely enough 
to support her without charity until she passes away. Mr. 
George proposes to take her all in the name of justice. 

Again : There was, forty years ago, a young man, son of a 
New England farmer, who had many children. The young man 
loved a young woman, and she loved him, — loved him enough 
to face every hardship, if it were with him. They two went 



"PROGRESS AND POVERTY." 43 

into the wilderness, knowing that a life of privation was before 
them, but knowing that in course of time the country would 
become settled, and that their farm would in the meanwhile be 
their bank, in which many years of labor might, under the laws 
of their country, be safely deposited. They looked forward to 
an independent old age, and something with which to give their 
children a start in life. Even now, in their declining years, 
their farm has no rent which can be distinguished from the rent 
for improvements. Then, says Mr. George, let the rent of all be 
taken. And this in the name of justice ! 

To the mind of Mr. George, rent is monopoly. He imagines 
one man owning all the land, and infers that under such circum- 
stances the whole population would be his slaves. But what 
light does such an imagining throw upon the case of the United 
States, where there are certainly many millions of land-own- 
ers ? The land-owners of the country cannot possibly com- 
bine to make food scarce, nor can the land-owners of the city 
combine to make commodities dear. There are plenty of other 
sites for cities, and there are plenty of competing cities already. 
The rents which are paid are paid simply because the sites are 
worth more than is paid for them. They would not be any 
lower if they were paid to the government instead of to indi- 
viduals ; and if city governments are the sinks of corruption Mr. 
George believes them to be, the transfer of the funds into their 
hands would not seem to be in the interest of civilization. It 
would be infinitely better to leave them in the hands of the 
present owners, to be by them distributed — as they must 
be — for services and for commodities, and for the formation 
of new capital, by which the annual product may be still further 
augmented. 

Mr. George instances several cases in which land-owners in 
Great Britain have manifestly abused their power and pushed 
the rights of property beyond their just limits. Such instances 
are proper for legal restraint. It is not necessary to confiscate 
all property in land in order to prevent some abuses. To turn 
Mr. George's favorite illustration upon him : it is not necessary 
to burn down your house because there is a pig in it. The pig 
can be driven out. 



44 " PROGRESS AND POVEEXr." 



RENTS IN A GROWING COUNTRY. 

Our author appears to have knowledge of only one kind of 
rent — that of Ricardo — which arises from a pressure of popu- 
lation upon subsistence forcing inferior lands to be taken into 
cultivation, and is thus an evidence of diminishing comfort. 
But there does not seem to be any rent of this description in the 
United States. The rent of farming lands generally is as yet 
the rent of improvements, and the rent in cities and the vicinity 
of cities is spontaneous ascending rent arising out of an improve- 
ment, not out of a diminution, of the productiveness of labor. 
Capitalists set themselves down beside one another and carry on 
certain industries at so great an advantage that more capital can 
be applied to the adjacent farms, and their product be greatly 
increased. The distant farms produce just as much as before. 
As the city grows, rents in some portions increase ; and some 
capitalists, enticed by this chance, build stores and houses rather 
than engage in manufacturing. For the opportunity to do this 
they are willing to pay high prices for land, and the capital they 
would otherwise employ themselves is employed by others, from 
whom they buy land. 

Some persons or families who have made fortunate or saga- 
cious investments of this sort have benefited largely ; they have 
drawn the prizes in tlie Land Lottery. But others, many others, 
draw blanks. I have in mind not a few. One where $50,000 
were loaned upon property, the property foreclosed, and, after 
twenty years, sold for one third of the sum advanced, not a cent 
of interest having been ever received. Another, a case of prop- 
erty held twenty years and not yet salable at first cost, having 
never yielded any income, and being taxed all the time at its 
full value. These cases were in a city. The city in the latter 
case grew the wrong way ! That it is best for society that prop- 
erty in land should be under individual management is so mani- 
fest that even Mr. George admits it; but he proposes to take 
the income of it for the State, because every infant born in the 
world has an equal right to his individual proportion of the 
planet ! 

To the writer the proposal appears to be unwise, useless, uu- 



"PROGRESS AND POVERTY." 45 

just, and wicked. That abuses of the rights of property ought 
to be restrained, and that a limit might be, and perhaps ought to 
be, fixed to the quantity of land that any one man or family 
may engross, may be admitted ; but the suggestion that society 
may repudiate its own titles, without compensation, under the sub- 
terfuge that the present generation cannot be bound by the past, 
is one which so evidently upright a person as our author could 
never have made if he had not been carried out of himself by the 
imagination that he had discovered the source of all social evil. 

Would that he had ! With fifty years of moderate economy 
we could buy back our concessions, and, thereafter, there would 
be no more poverty or wickedness upon earth ! But, alas ! his 
supposed cause (the rise of real estate before a panic) is not a 
cause, but a concurrent effect of quite another cause. 

THE LAWS OF WAGES. 

But if our examination of " Progress and Poverty " shows that 
we must abandon the belief in the 'discovery by our author of a 
panacea for all social evils, it shows, on the other hand, that we 
may dismiss his fears of wages tending to a minimum, and of 
rent devouring the whole annual product. 

So long as this annual product increases, wages also must in- 
crease ; and there appears to be no reason to apprehend that they 
will not increase for a long period unless the people, misled by 
fallacious advice, should abandon the protective policy and permit 
the recipients of rent and of profits, and the non-productive 
classes, who are supported out of rent and profits, to send abroad 
for the greater part of their commodities. So long as the men 
who get their ten or twenty or thirty or more dollars a day from 
fees, salaries, or profits, are content to buy their commodities 
from the men who get their dollar and a half, or two dollars, or 
three dollars a day, so long (until, at all events, population 
presses on the means of subsistence) will the annual product, 
and the consequent remuneration to every kind of labor, con- 
tinue to augment. The progress will not be continuous, but in 
waves ; and during the retrocessions there will be severe dis- 
tress among all classes who have not laid by something for the 
"rainy day." 



46 "PROGRESS AND POVERTY." 

How these periods of depression may be shortened and made 
less frequent is worthy of the profound study of the intelligent 
and philanthropic ; and, meanwhile, it is some consolation to see 
clearly that such periods are by no means mere aggravations of 
a general course of economic deterioration, as Mr. George sup- 
poses, but that they are, on the contrary, only temporary pauses 
in a general course of economic improvement. 

And now, having performed the disagreeable task of picking 
flaws in " Progress and Poverty," let us gratefully admit, once 
more, that it is a brilliant book, glowing with a noble philan- 
thropy, courage, and self-devotion. All that we have read in 
fable, or history, or the records of science, is brought again to 
mind in admirable sentences, and there is much of most inter- 
esting and suggestive thought and speculation. If political 
economy could all be strained out, there would remain a vol- 
ume which every critic would applaud, and which the general 
reader would turn to again and again as a source of improve- 
ment and pleasure. As it is, the book is well suited to fas- 
cinate and mislead, the inexperienced, the impatient, the many 
who judge by the heart rather than by the head, and all those 
who, in seeking an imaginary right, are willing to commit a 
certain and irretrievable wronir. 



University Press : John Wilson & Son, Cambridge. 



